Repayment structure : Mortgage types

Table loan

This is the most common type of home loan. You can choose a term up to 30 years with most lenders. Most of your early repayments pay off the interest, while most of the later payments pay off the principal (the lump sum you borrowed).

You can take a table loan with a fixed rate of interest or a floating rate.

Application fees for table loans range from nothing to over $1,000. Most lenders charge around $200 to $400. This is often negotiable.

Advantages:

• Table loans provide the discipline of regular payments and a set date when they will be paid off.
• They provide the certainty of knowing what payments will be, unless you have a floating rate, in which case repayment amounts can change.

Disadvantages:

• Fixed regular payments might be difficult for people with irregular income.

Revolving credit loan

Revolving credit loans work like a large overdraft. Your pay goes straight into the account and bills are paid out of the account when they’re due. By keeping the loan as low as you can at any time, you pay less interest because lenders calculate interest daily.

You can make lump sum repayments and re-draw money up to your limit. Some revolving credit mortgages gradually reduce the credit limit to help you pay off the mortgage.

Application fees on revolving credit home loans can be up to $500. There can be a fee for the day-to-day banking transactions you do through the account.

Advantages:

• If you're well organised, you can pay off your mortgage faster. This also suits people with uneven income as there are no fixed repayments.
• Putting surplus funds into this account rather than a separate savings account will give bigger interest savings and also avoids the tax on the savings account interest.

Disadvantages:

• You need discipline. It can be tempting to always spend up to your credit limit and stay in debt longer.

Reducing loan

Reducing or straight line mortgages repay the same amount of principal with each repayment, but a reducing amount of interest each time. These are quite rare in New Zealand. Payments start high, but reduce (in a straight line) over time. Fees are similar to table loans.

Advantages:

• You pay less interest overall than with a table loan because early payments include a higher repayment of principal.
• These may suit borrowers who expect their income to drop, for example, if one partner plans to give up work in a few years time.

Disadvantages:

• If you can afford higher payments you would be better to take a table loan with payments high for the whole term, so you’ll pay less interest.

Interest-only

You pay the interest-only part of your repayments, not the principal, so the payments are lower. Some borrowers take an interest-only loan for a year or two and then switch to a table loan. The normal table loan application fees apply.

Advantages:

• You have more cash for other things, such as renovations.

Disadvantages:

You will still owe the full amount that you borrowed until the interest-only period ends and you start paying back the loan.

Packaged home loans

Packaged home loans are offered by banks to people in a particular profession or those borrowing over a certain amount — sometimes it's over $150,000 but more commonly over $250,000. They were originally introduced to cater to high income earners but have now become more widely available to certain professional groups, those who need to borrow a higher amount or those who have a good relationship with the bank. Features include rate discounts, reduced ongoing fees, fee-free credit cards and transaction accounts.

Pros: you get a discounted rate not only on the home loan but benefits on other products as well, depending on the institution.

Cons: Resi mortgage warns that yearly fees for these packages are often around $300 and the benefit of the reduced interest might be much less. So make sure you get value for money. You're also tied to the one institution for a range of services which can be limiting.

Who they suit: These are great for people who need to borrow large sums or are a member of a particular professional group, says Senlitonga. It's also ideal for those who need a whole suite of products.

Loans worth a look: In our 2006 Best of the Best awards, Money awarded the gold gong for Best Home Loan Banking Package to Commonwealth's Wealth package which offers a 0.62 percent discount on the AAPR. Westpac's Premium package and Bank West's Gold Home Loan Package took out the silver and bronze awards respectively.

Fixed-Period Adjustable-Rate Mortgage (ARM) or hybrid ARM

Most lenders today offer a fixed-period or “hybrid” ARM,—which is an adjustable-rate mortgage that features an initial fixed interest rate period, typically of 3, 5, 7, or 10 years. After the fixed-rate period expires, the interest rate becomes adjustable for the remainder of the loan term. Fixed-period ARMs are often named by the length of time the interest rate remains fixed.

Example: In a 5/1 ARM, the “5” stands for the five-year “introductory period,” during which the interest rate remains fixed. The “1” shows that the interest rate is subject to adjustment once per year after the introductory period and for the remainder of the loan term.

About the introductory period: The rate on this kind of loan tends to be lower during the introductory period, which could mean a lower starting monthly payment. However, when the introductory period ends, your rate will go up or down depending on changes in the financial Glossary Term: index Information Panel to which your loan is associated. If considering an ARM, carefully consider your ability to handle potential increases to your rate, and consequently, your monthly principal and interest payment.

Caps: ARMs have two kinds of Glossary Term: rate caps Information Panel. Glossary Term: Adjustment caps Information Panel limit how much your rate can go up or down in any single adjustment period, limiting how much your loan payment can change when it adjusts. Glossary Term: Lifetime caps Information Panel establish a maximum, and minimum, interest rate over the entire life of a loan. Many caps allow a significant increase in each adjustment period and over the life of the loan, so despite having a cap, the increase in the monthly payment allowable under the cap may still result in “payment shock.” Such an increase may make it difficult, or impossible, for you to pay your mortgage on time if interest rates rise. If you’re considering an ARM, find out what the caps would be and then run the numbers to see if you could still comfortably afford the monthly payments allowable under the rate caps.

Advantage
Hybrid ARMs generally offer lower rates during the introductory fixed rate period than fixed-rate mortgages.

Considerations

• After the introductory period’s fixed rate expires, the rate is subject to adjustment. The rate could increase at this point, which would also increase your payments. This can make paying your mortgage on time more difficult.
• If you choose this kind of loan, be sure it includes an adjustment cap and/or lifetime interest cap. Keep in mind that many adjustment or lifetime caps would still result in Glossary Term: payment shock Information Panel, which is a term used to describe a significant increase in your monthly payment. For example, if you had a 5/1 ARM with a starting interest rate of 4.0% (and interest rates rose) and your rate increased by 2 percentage points in the first two adjustment periods, by year 7, your interest rate would be 8.0% -- so your monthly payment would double from the starting monthly payment. So ask for details and plan accordingly.

The Procedure Lumbar Puncture / Spinal Tap

An LP takes about 30 minutes. The doctor carefully inserts a thin needle below the spinal cord — between the bones of the lower spine (vertebrae) — to withdraw the fluid sample.

The patient is positioned with the back curved out, so the spaces between the vertebrae are as wide as possible. This makes it easier for the doctor to insert the needle.

Older kids might be asked to either sit on an exam table while leaning over with their head on a pillow or lie on their side. Infants and younger children are usually positioned on their sides with their knees under their chin.

Lumbar Puncture

Once the child in the correct position, the back is cleansed with an antiseptic and a sterile area is maintained to minimize infection risk. The doctor performing the procedure also wears sterile gloves while performing the procedure.

A small puncture through the skin on the lower back is made and liquid anesthetic medicine is injected into the tissues beneath the skin to prevent pain. In many cases, before the injected anesthesia medication is given, a numbing cream is applied to the skin to minimize discomfort.

The spinal needle is thin and the length varies according to the size of the patient. It has a hollow core, and inside the hollow core is a "stylet," another type of thin needle that acts kind of like a plug. When the spinal needle is inserted into the lower lumbar area, the stylet is carefully removed, which allows the cerebrospinal fluid to drip out into the collection tubes.

After the CSF sample is collected (this usually takes about 2-5 minutes), the needle is withdrawn and a small bandage is placed on the site. Collected samples are sent to a lab for analysis and testing.

Sometimes doctors also measure the amount of pressure in the CSF using a special device called a manometer. High CSF pressure can happen under certain conditions, like meningitis.

The Risks of a Lumbar MRI Scan

Unlike X-rays and computed tomography (CT) scans, an MRI does not use radiation. It is considered a safer alternative for everyone, especially pregnant women. Although side effects do sometimes occur, they are extremely rare. There have been no documented side effects from the radio waves and magnets used in the scan to date.